UK / EU -
Hybrid freedom of movement system with cap based on average salary

Much of the discussion about how a post
Brexit UK / EU migration system will work has been polarised between maintaining
the current system of freedom of movement in return for access to the single
market or imposing limits via some mechanism like a points based system. The
latter based upon the hope that as a major trading partner the UK will be given
preferential access to the single market by the EU compared to other non-member
countries.

The reality is that neither of these will
be acceptable to the different parties involved. Several leaders of other EU
member states and various EU officials have made clear that freedom of movement
is a fundamental principle of the single market. From a UK perspective given
voters desire for ‘something to be done about immigration’ some form of
restriction is expected. There are also practical considerations for business
and even the ability of the Border Agency, given its current performance to
actually take on and manage this additional administrative burden effectively.

In 2004 the European Union was enlarged
with the accession of Cyprus, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia, and Slovenia. At the time transitional
restrictions for workers from these new countries were put in place by many
countries (Freedom of movement
for workers in the European Union). Similar restrictions were also
applied to Bulgaria and Romania when they join the European Union on 1
January 2007.

Access to the single market but with restrictions to labour movement has
been tried and tested before, when countries have joined, why not when a
country leaves?

The hybrid system of freedom of movement with restrictions outlined below
is a variation of the transitional arrangements applied when new members joined the EU in 2004 & 2007,
however, it is less restrictive in that movement from countries which are
subject to restrictions will still occur. The proposal is based upon the
premise that where countries are economically balanced then migration will also
tend to be balanced and where there is a greater variance then the pull of
economic migration will be more one sided.

Issues of compliance and enforcement of immigration rules, which the Border
Agency, HMRC and the DWP will have to deliver by working far more closely than
they have done to date are not considered here.

Hybrid
freedom of movement system rules

1)

The system will apply to new migration from whatever Brexit cut-off
date is agreed.

2)

Only established citizens of their host EU countries will be eligible
i.e they must have had citizenship for a minimum of 10 years or be dependants
of established citizens.

3)

Restrictions will be
triggered where a countries average salary rate is below 50% of the UK
average salary rate.

4)

The actual difference
between a countries average salary rate and the UK average salary rate will
be applied against the benchmark number of migrants who came to the UK from
the ONS data in 2014 for that country. For example total work related
migration from Poland in 2014 was 29,500, the average net salary in 2016 was
34% of that in the UK. A reduction of 66% is then applied to the 29,500
migration count giving a reduction of 19,470 and leaving an annual limit or
cap of 10,030.

5)

As average salaries in
countries subject to restrictions converge over time towards that of the UK
the reduction applied will fall.

6)

Once the difference in
average salary is above the 50% threshold restrictions will be removed and
freedom of movement will follow.

7)

For bilateral reasons the
UK Government may decide to amend the cap or remove it entirely for example
by waiving restrictions applied to Portugal.

These rules will ensure that freedom of movement with 15 European countries
will be unchanged upon Brexit. Migration from the remaining EU countries will
be subject to a cap, however, the cap will rise as their economies converge
with that of the UK and migration will still occur albeit on a reduced level.

The proposed system will deliver a reduction in work related migration of
over 76,000 in its first year as per the table below.